Over the past 30 years I've been in this business I've come across a lot of bad contractors but I also know a lot of good ones as well. Here's a few tips on how I would find a good, these would apply to all trades.
Referrals: Talk to your neighbors, family and friends and ask who they hired. Ask if they are happy with the work, if it came in on budget, on time etc. It probably wouldn't be a bad idea to actually see the work completed as your standards may be higher then what was done.
Business years: I find that if a person has been in the business for many years it's usually because they do good work, are honest and trustworthy and know what it takes to make customers happy and do the job right.
Retailers: Go to a retailer where that specific trade may buy supplies. Paint stores for painters, lumber yards for carpenters etc. These retailers will get a lot of feed back on who is good and who you should stay away from. If you have someone in mind ask them if they've dealt with him/her before.
Insurance: This is one thing we all hope we will never need but it's a must. If the contractor doesn't carry liability insurance then you may be stuck with the bill if something catastrophic happens.
Deposits: This is a bit of a grey area, I personally have never asked for a deposit. In some cases where the material costs may be high I can see issuing a deposit once the materials have been delivered to the job location but not until this happens and it should not exceed the material costs. Draws can happen on larger jobs where it may take months to complete and labor and material costs are high. In this case the contractor will set a specific time when he/she expects to be paid a percentage of the agreed price, this should be mentioned before work even begins. If the contractor asks for a deposit before work starts walk away and find another.
Quotes: Get 3 quotes if you can, do not tell the the contractors the price of the other quotes. What will happen is they will simply knock off 5% of their quote without even thinking about what is involved just to get the job. Be specific with each one on what you expect from him/her and the work they do. You will probably end up with a low ball price and 2 others that are fairly close to one another. I personally would stay away from the low price (especially if it's really low) because chances are the quality of work will be low as well.
Equipment: Look at the condition and type of the vehicle they work from, condition not age. If it looks like it's ready for the junk yard then they probably don't take their business seriously or take pride in their work, after all this is a contractor's work platform, without a dependable vehicle we simply can't get to work. Also look at the type, does it look like it will carry the tools and supplies needed to do the job. I've seen painters working from compact cars and trust me, you can not carry all that is needed to do a proper job in a compact.
I hope this helps you even just a little bit. Good luck and I hope your next project goes smoothly.